SBJ/October 5 - 11, 1998/No Topic Name
Baseball bounces back
Published October 5, 1998
In ballpark offices across the nation, calculators are cranking and adding machines whirring, tabulating the streams of revenue stimulated by baseball's home run chase this season.
But you need look no further than the turnstiles to find the first of a series of upbeat indicators that will flow forth in the coming weeks, as teams, leagues, licensees, manufacturers and retailers total their booty from assaults on history by Mark McGwire and Sammy Sosa.
The St. Louis Cardinals and Chicago Cubs both delivered substantial gains for the ballparks they visited this summer. The Cards provided attendance spikes of 33 percent to weekday games and 24 percent to weekend games, and the Cubs delivered boosts of 25 percent on weeknights and 33 percent on weekends.
The figures, generated by a Street & Smith's SportsBusiness Journal analysis of announced attendance, compared the road gate that the Cardinals and Cubs generated at each ballpark with those provided by other teams at the same parks on similar nights.
The analysis showed that, over the course of 82 road dates, McGwire's historic tour generated an additional 502,983 customers for the ballparks in which he played. The Cubs delivered an even greater incremental gain 569,827 fans but that can't all be attributed to Sosa, since the Cubs, with their WGN superstation appeal, long have been one of baseball's premier road draws.
Using major league baseball's average ticket price $13.60, according to Team Marketing Report and discounting it slightly to account for unsold seats in premium areas, McGwire's impact on gross ticket revenue gains can be estimated at $6.3 million.
That does not include parking or concessions, which, counting a conservative estimate of $5 spent per customer, would add $2.5 million to the road total. And it also doesn't count McGwire's impact on attendance in St. Louis, where the Cardinals drew 3.1 million, an increase of 22 percent (576,886) over their gate of last season.
"A year ago I was saying that we were in the early stages of a powerful recovery," baseball Commissioner Bud Selig said. "Now I would say we are back, that we have pretty much repaired all of the attendance damage. It's been a remarkable, storybook season. In my wildest, most optimistic dreams, I never would have thought we could come this far this quickly."
While much of the evidence thus far is anecdotal, there are some numbers that support that view.
Major League Baseball Properties reported gains of "strong double digits" in the second and third quarters, which didn't take into account the effects of the home run record or the postseason. Those gains, driven mostly by the sales of caps, apparel and video games, are even more impressive when considering the continued flat line of the trading card market, which makes up more than 20 percent of MLBP's revenue.
"I've been trying to convince buyers for a long time about how big their baseball business could be if they supported us," said Rick Platt, director of national retail marketing for Major League Baseball Properties. "Now, they're seeing results. Great results. We're all anticipating it will go through Christmas and spring training. The momentum is tremendous."
The group is projecting sales of $1 million from 350,000 catalogs that it mailed Aug. 31, a gross of almost $3 a catalog, which is double baseball's typical catalog sales rate.
"It's unheard of," Platt said.
The most significant effects may be the ones that are felt down the line if baseball can sustain its resurgence once the home run chase and the Yankees' quest for the best record ever are left in its rearview mirror.
Baseball's current television deal, which paid $1.7 billion across five years, expires in 2000. ESPN reported ratings gains of 20 percent this season. Fox said its numbers for Saturday telecasts were up 12 percent.
The home run chase didn't deliver significant increases in television revenues, said Leslie Sullivan, vice president for broadcasting at MLB. "But the dollars were really secondary in what we wanted to do," Sullivan said. "The whole purpose was to get the exposure. It gave us the opportunity to serve our core fan and attract fans that were drawn to baseball because of the race.
"Look at the excitement that the home run chase generated all across the world. Baseball in the last couple of months has been in every section of the newspaper. There aren't that many sports that can capture attention like that."
Expect MLB to drive that point home repeatedly in the coming years, as the sport angles itself against the NBA, which is in a labor crisis, and the NFL, which carries higher ratings but offers fewer games.
Networks and advertisers will watch the postseason closely, said Neil Pilson, a former CBS Sports president who now operates a consulting firm.
"The fact that three of the five largest markets are in the postseason means good things for baseball," Pilson said, predicting ratings increases of 5 percent to 10 percent over last year. "If that trend continues, you could see renewed competition for the television rights. That's the key element. It's been the wild-card bidder Fox in '93, CBS in '97 that has driven up NFL rights. In the case of hockey, it was the ongoing war between Disney and Fox.
"They still have to deal with the perception that their game is older and not as demographically desirable as the others. But baseball's standing certainly appears to be looking up."